Correlation Between Tat Techno and Eq Energy

Can any of the company-specific risk be diversified away by investing in both Tat Techno and Eq Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tat Techno and Eq Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tat Techno and Eq Energy Drink, you can compare the effects of market volatilities on Tat Techno and Eq Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tat Techno with a short position of Eq Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tat Techno and Eq Energy.

Diversification Opportunities for Tat Techno and Eq Energy

-0.55

Correlation Coefficient

Tat Techno  Eq Energy

Excellent diversification

The 3 months correlation between Tat and EQLB is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Tat Techno and Eq Energy Drink in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eq Energy Drink and Tat Techno is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tat Techno are associated (or correlated) with Eq Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eq Energy Drink has no effect on the direction of Tat Techno i.e., Tat Techno and Eq Energy go up and down completely randomly.

Pair Corralation between Tat Techno and Eq Energy

Given the investment horizon of 90 days Tat Techno is expected to generate 0.26 times more return on investment than Eq Energy. However, Tat Techno is 3.92 times less risky than Eq Energy. It trades about 0.16 of its potential returns per unit of risk. Eq Energy Drink is currently generating about -0.01 per unit of risk. If you would invest  1,663  in Tat Techno on September 3, 2024 and sell it today you would earn a total of  615.00  from holding Tat Techno or generate 36.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Tat Techno  vs.  Eq Energy Drink

Tat Techno

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tat Techno are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Tat Techno unveiled solid returns over the last few months and may actually be approaching a breakup point.

Eq Energy Drink

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eq Energy Drink has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Tat Techno and Eq Energy

The main advantage of trading using opposite Tat Techno and Eq Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tat Techno position performs unexpectedly, Eq Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Eq Energy will offset losses from the drop in Eq Energy's long position.

The idea behind Tat Techno and Eq Energy Drink pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.